United States District Court, M.D. Florida, Fort Myers Division
REPORT AND RECOMMENDATION
MCCOY UNITED STATES MAGISTRATE JUDGE.
parties filed a Joint Motion for Approval of Settlement and
Dismissal of the Case with Prejudice and Supporting
Memorandum of Law on October 17, 2019. (Doc. 47). Plaintiff
Diann Kynett and Defendant Sai Shyam Hotels, LLC, jointly
request that the Court approve the terms of their proposed
Settlement Agreement and Fair Labor Standards Act
(“FLSA”) Release and dismiss the matter with
prejudice. (Id. at 1). The proposed Settlement
Agreement is attached as Exhibit A to the parties'
motion. (See Doc. 47-1). After a careful review of
the parties' submissions and the court file, the
Undersigned respectfully recommends that the presiding United
States District Judge APPROVE the proposed
approve the settlement of FLSA claims, the Court must
determine whether the settlement is a “fair and
reasonable resolution of a bona fide dispute” of the
claims raised pursuant to the FLSA. Lynn's Food
Stores, Inc. v. United States, 679 F.2d 1350, 1355 (11th
Cir. 1982); 29 U.S.C. § 216. There are two ways for a
claim under the FLSA to be settled or compromised.
Id. at 1352-53. The first is under 29 U.S.C. §
216(c), providing for the Secretary of Labor to supervise the
payments of unpaid wages owed to employees. Id. at
1353. The second is under 29 U.S.C. § 216(b) when an
action is brought by employees against their employer to
recover back wages. Id. When the employees file
suit, the proposed settlement must be presented to the
district court for the district court's review and
determination that the settlement is fair and reasonable.
Id. at 1353-54.
Eleventh Circuit has found settlements to be permissible when
employees bring a lawsuit under the FLSA for back wages.
Id. at 1354. The Eleventh Circuit held:
[A lawsuit] provides some assurance of an adversarial
context. The employees are likely to be represented by an
attorney who can protect their rights under the statute.
Thus, when the parties submit a settlement to the court for
approval, the settlement is more likely to reflect a
reasonable compromise of disputed issues than a mere waiver
of statutory rights brought about by an employer's
overreaching. If a settlement in an employee FLSA suit does
reflect a reasonable compromise over issues, such as FLSA
coverage or computation of back wages, that are actually in
dispute; we allow the district court to approve the
settlement in order to promote the policy of encouraging
settlement of litigation.
Id. at 1354.
Complaint, Plaintiff alleges that Defendant hired her to work
as a non-exempt hourly front desk employee at its Motel 6
property from April 5, 2014 until May 6, 2018. (Doc. 1 at 3).
Plaintiff alleges that during her employment with the
Defendant, Plaintiff was required to perform work for which
she was not compensated. (Id.). Specifically,
Plaintiff alleges that during her employment she regularly
worked in excess of forty (40) hours within a work week and
averaged sixty (60) or more hours worked per week.
(Id.). Plaintiff maintains that Defendant failed to
pay her for her overtime hours worked at time and one half
her regular pay as well as failing to maintain proper time
records as required under the FLSA. (Id. at 3-4).
Plaintiff states prior to filing this lawsuit Defendant did
not consult with an attorney, the DOL, or an accountant to
evaluate whether Plaintiff's actual job duties and pay
structure rendered her exempt from recovering payment for all
overtime hours she worked under the FLSA. (Id.).
Plaintiff alleges, “Defendant's actions were
willful and/or showed reckless disregard for the provisions
of the FLSA, as evidenced by its failure to compensate
Plaintiff at the statutory rate of one and one-half times
Plaintiff's regular rate of pay for the hours worked in
excess of forty (40) hours per week when it knew, or should
have known, such was, and is due.” (Id. at 5).
Plaintiff asks the Court for relief, alleging that
“[d]ue to the intentional, willful, and unlawful acts
of Defendant, Plaintiff suffered, and continues to suffer,
damages and lost compensation for time worked over forty (40)
hours per week, plus liquidated damages.”
(Id.). She also requests an award of reasonable
attorneys' fees and costs pursuant to 29 U.S.C.
§216(b). (Id.). On July 6, 2019, Defendant
responded by filing a Motion to Dismiss or for a More
Definite Statement (Doc. 6) followed by a Notice of
Withdrawal of Motion to Dismiss or for More Definite
Statement (Doc. 10). On August 10, 2019, Defendant filed its
answer, denied liability, and asserted as an affirmative
defense that Defendant is entitled to a 3(m) credit for
lodging provided to Plaintiff. (See Doc. 12).
OF THE PROPOSED SETTLEMENT
threshold matter, the Undersigned finds that a bona fide
dispute exists between the parties. As the parties adequately
explain in their joint motion:
Plaintiff alleges that she worked as an hourly paid
non-exempt employee, and that while she worked in excess of
forty (40) hours per week, Defendant failed to pay her full
and proper overtime compensation for all hours worked over
forty (40) per week. The Defendant denies Plaintiff's
allegations and whether she is entitled to any relief
whatsoever and maintains that Plaintiff was fully compensated
for all hours that she worked for Defendant. Defendant also
contends that any alleged overtime owed to Plaintiff, is to
be set off based on the fact that Defendant provided
Plaintiff with housing. The Defendant also contends that
there is no liability for liquidated damages because its
actions were in good faith and it had reasonable grounds to
believe their acts, practices or omissions were not a
violation of the FLSA as provided at 29 U.S.C. §541.200
and 29 U.S.C. §541.203.
After considering the above dispute, the Parties agreed to a
settlement of Plaintiff's claims. The Parties have
exchanged pay records and made calculations regarding back
pay. After consideration of Plaintiff's allegations and
the Defendant's defenses, the Parties agreed pursuant to
the Settlement Agreement and FLSA Release that Plaintiff will
receive wages for alleged time spent ...